Oct. 20 (Bloomberg) -- Royal Bank of Canada may gain, based on bids on the Toronto Stock Exchange, as the cost of borrowing fell, signaling that governments' efforts to save the financial system may be having an effect.

Equities rallied in Asia and Europe and U.S. stock-index futures rose, after the London interbank offered rate for three- month loans in U.S. dollars, or Libor, dropped 36 basis points to 4.06 percent today, the biggest decline since January, according to the British Bankers' Association.

EnCana Corp. and Potash Corp. of Saskatchewan Inc. may also rise, bids indicated, as corn jumped for a second day and soybeans advanced for a third, after rising equity markets and a rebound in crude-oil prices encouraged investors to buy commodities near year-low prices.

The Standard & Poor's/TSX Composite Index added 3.2 percent to 9,562.49 in Toronto on Oct. 17, notching its first weekly gain in a month.

Canada's main stock benchmark has fallen 37 percent from its June 18 record, as slumping commodity prices and more than $660 billion in credit losses at financial institutions around the world dragged down the energy, raw-materials and financial shares that account for three-quarters of the index's value.

Royal Bank, Canada's biggest lender by assets, may rise C$1.22 to C$47.77, bids already submitted in Toronto showed.

EnCana, the nation's largest energy company by market value, may gain C$5.12 to C$54, bids showed.

Potash Corp., the world's biggest maker of crop nutrients, may advance C$5.80 to C$93.50, bids suggested.

To contact the reporter on this story: John Kipphoff in Montreal at jkipphoff@bloomberg.net.

Last Updated: October 20, 2008 09:25 EDT